On Thursday, Life Insurance Corporation (LIC) announced that it has raised its shareholding in private sector lender IDFC First Bank by 0.2 per cent to 2.68 per cent. This increase was achieved through a private placement offer, with LIC investing Rs 80.63 crore in the lender. The private placement offer took place on June 30, and as a result, LIC’s shares closed higher by Rs 22.25 or 2.25 per cent at Rs 1,010.05 apiece on the BSE, while IDFC First Bank’s shares were up by Rs 0.32 or 0.40 per cent to close at Rs 81.19 apiece on the BSE.
In numerical terms, this increase translates from 1,42,01,484 shares to 20,02,36,384 shares, representing an investment of Rs 150 crore. LIC acquired these shares at a price of Rs 80.63 each, as part of a private placement offer by IDFC First Bank on June 30.
Impact on Shareholding and Market Performance
With this acquisition, LIC has increased its shareholding in the bank from 1.42 crore shares to 20.02 shares, i.e., “0.20% of the pre-issue paid-up capital to 2.68% of the post issue paid-up capital of the said company,” as stated in the exchange filing. The total cost of acquisition is Rs 1,500 crore. The announcement was made post the market hours, and IDFC First Bank’s shares on Thursday ended at Rs 81.19 on the BSE, gaining by Rs 0.32 or 0.40%. Meanwhile, LIC shares closed at Rs 1010.05, gaining Rs 22.25 or 2.25% over Wednesday’s closing price.
Conclusion
In summary, LIC’s increase in shareholding in IDFC First Bank to 2.68% through a private placement offer represents a significant investment in the private sector lender, impacting both the bank’s market performance and LIC’s own market position.